The Gold Market Seen Through a Glass Darkly

...In December 2012, it is clear the bankers drew a ‘line in the sand’ in September 2011 to prevent another rapid ascent in the price of gold. To some, this ‘line in the sand’ presents a major barrier to gold’s advance. But, in reality, the bankers’ line in the sand represents the bankers’ desperate last ditch attempt to prevent the inevitable from happening. The systemic distress that drove gold’s 27 % rise between July and September to $1900 has not abated although the lower price of gold would imply otherwise. The present price of gold below $1800 is due solely to central bank emergency measures to contain the price of gold and China’s reluctance to let gold rise too far too fast before China can buy as much gold as possible before the next economic crisis. 2013: GOLD WAITS FOR THE END OF THE BANKERS’ CONFIDENCE GAME Speculation abounds as to the trigger event that will set off gold’s vertical ascent. It could be the collapse of the global derivatives market or a credit event such as Credit-Anstalt’s collapse in 1931, the Austrian bank owned by the Rothschilds or perhaps Japan’s inevitable descent into the deflationary conflagration it has resisted since 1990. It could be any number of events or causes. It could be triggered by a black swan event, a geopolitical crisis or a natural disaster on the level of the earthquake that struck off the coast of Japan in March 2011. Whatever the trigger, in the end the banker’s 300 hundred year-old con game will collapse from a simple lack of confidence. Read the full article here

FED Keeps Pumping

Just watching Bernake speak and highlights that I see Holding interest rates at near 0. New round of stimulus launched. How can Gold not skyrocket anytime soon?

Gold prices rise ahead of Fed news

Gold prices rose in Europe on Wednesday ahead of a Federal Reserve monetary policy statement due later in the day, at which the US central bank is expected to announce more stimulus measures to support the country's economy. Analysts say the Fed, which ends a two-day policy meeting later on Wednesday, is likely to unveil monthly debt purchases of $45 billion, which will come on top of mortgage bond buying of $40 billion a month the bank started in September. Further easing measures would likely support gold by stoking inflation fears and maintaining pressure on long-term interest rates, the opportunity cost of holding non-yielding bullion. Spot gold was up 0.2 percent at $1,713.12 an ounce at 12:22 SA time, while US gold futures for December delivery were up $5.10 an ounce at $1,714.70. “If the Fed comes out and says it is going to put $45 billion into long term Treasuries, on the face of it that is good for gold,” David Govett, head of precious metals at Marex Spectron, said. “However, I think a lot of that concept is priced into the market already. You'll see an initial blip... we could see gold rally up to $1,725, $1,730. If they say they are going to increase the amount, gold will rally further. “However, if they don't do it, or they decrease the amount, I think gold is vulnerable on the downside,” he said. By Reuters Financial markets traded sideways ahead of the announcement, with the dollar little changed against the euro and European shares steady after a sharp three-week rally as investors anticipated more Fed stimulus. “For us, the most important precondition for gold gains is loose monetary policy,” UBS said in a note. “We don't think gold has priced in a sizeable expansion in the Fed's balance sheet beyond current levels, but we do think that quantitative easing will again loom large in the first half of 2013. This overrides many other potential gold drivers.” ETF HOLDINGS RETREAT Reuters data showed holdings of gold exchange-traded funds retreated on Tuesday, with both London-based ETF Securities and New York's SPDR Gold Trust reporting outflows. Holdings of products tracked by Reuters fell 108,000 ounces. China, the world's biggest gold miner, produced 34.6 tonnes of gold in October, bringing total output over the first 10 months of the year to 322.8 tonnes, up 11 percent from a year ago, a government department said on Wednesday. Among other precious metals, silver was up 0.4 percent at $33.07 an ounce, tracking gold. Spot platinum was down 0.1 percent at $1,631.50 an ounce, while spot palladium was up 0.2 percent at $690.80 an ounce. The gold/platinum ratio, which measures the number of platinum ounces needed to buy an ounce of gold, fell to a two-month low on Wednesday at 1.05, and platinum narrowed its historically unusual discount to gold to around $75, well below its average this year of $122. Platinum and palladium have outperformed in recent months, rising nearly 8 percent and 19 percent respectively since late October, with the autocatalyst metals benefiting from a brighter economic outlook in China and the United States. The planned launch of a physical platinum and palladium fund by Sprott also underpinned sentiment, traders said. Sprott, which already manages physical gold and silver ETFs, plans to sell 35 million units, each worth $10, which will be split into equal halves to buy physical platinum and palladium, it said in a filing this month. The trust could buy more than 107,000 ounces of platinum and 253,000 ounces of palladium, raising the amount of metals held by ETFs by 7 and 14 percent respectively, Reuters calculations showed. - Reuters

Renewed Interest in Gold as a Financial Asset

You may be among those investors who had the opportunity, but did not seize it, to buy gold cheap in the early 2000s. You may also be willing, but hesitant, to do so at current prices, while still desiring the "anti-crash insurance" it represents. However, you should be aware that the yellow metal is increasingly valued as a reserve asset, which will tend to push the price up, independently of all other factors. Due to new regulations, you may also have to bid in the future alongside financial institutions, including several banks, to acquire it. Read the article on 321gold here

Dollar’s weakness may cap gains in Gold

CHENNAI: Hopes of the US Federal Reserve Bank announcing more stimulus measures to boost economy could drive gold higher on Tuesday. However, the dollar’s weakness against a basket of major currencies could cap gains. Economists say that the US Fed will announce purchase of bonds worth $ 45 billion after its meeting on Tuesday and Wednesday. This would mean pumping money in the US economy to improve employment prospects. This uncertainty over economy will force investors to shift to haven commodities such as gold. In early trade in Singapore, spot gold ruled steady at $ 1,710.70 an ounce, while gold futures were quoted at $ 1,713. In the domestic market on Monday, gold for jewellery (99.5 purity) increased to Rs 31,205 for 10 gm, while pure gold (99.9 purity) advanced to Rs 31,340. In the forex market, the dollar was down against the yen and euro in view of the speculation of US stimulus measures. Any weakness in the dollar will make imports cheaper. India depends on imports to meet its demand for commodities such as gold, crude oil and vegetable oils. Expectations that the US Department of Agriculture will come up with data showing lower inventories drove soyabean higher on Chicago Board of Trade (CBOT). Export enquiries also aided the uptrend. See the full article on msn here

Precious Metals Update – Intermediate Low at Hand

From financialsense.com Precious metal investors have had a rough year with gold stocks down double-digits while gold is set to log another positive year. Gold stocks bottomed this summer as is their custom, but rather than rallying into the end of the year they’ve hit another rough patch and have given back much of their fall rally. However, the overbought condition in gold stocks leading into October has been worked off and it appears we may be seeing another intermediate low. The big caveat is the obvious fiscal cliff situation where politicians may drive the whole market down as they did with last year’s debt ceiling fiasco. Politics aside, we still have the setup of an intermediate low and gold stocks may begin to show signs of strength in the weeks ahead. From Overbought to Oversold The big fall rally that saw the NYSE Gold Bugs Index (HUI) rally nearly 40% in a span of two months produced a pretty overbought condition. Our Gold Stock indicator nearly hit an extreme overbought reading near 1.0 but has since returned back to near -1.0, a level that often marks significant intermediate lows. Another view of the HUI is its rate of change (ROC) over various time frames. The 20 day ROC is great at finding short term lows while a 60d ROC is better at identifying intermediate lows. As seen below, both the 20d ROC and the 60d ROC are near their lower extremes, indicating that not only may a short term bottom have formed but also an intermediate one.

Silver gains favor as an investment asset

Last month, Thomson Reuters GFMS said investment demand will likely be the prime driver of the silver price this year. The precious-metals consultancy forecast that implied net investment would jump 82 million ounces to 234 million in 2012 from 2011, even as demand for silver in industrial applications is expected to fall nearly 28 million ounces Read the full atricle on marketwatch here.